His main premise: small and medium enterprises (SMEs) lag 3-5 years behind larger enterprises when adopting technology. He lists the reasons:

"SMEs are not very IT-focused. For many, IT is an after-thought. Part of the reason is that these enterprises do not necessarily have a dedicated IT department. Most of the decisions are made by the owner-managers or the finance people. As such, the use of IT is limited largely to some of the four basic needs -- email, productivity applications (word processor and spreadsheet), accounting and a website.

SMEs are hard to reach. They are small and distributed. While it is easy to get to the large companies (and for the large companies to get to the IT vendors), SMEs are a hard market to crack.

SMEs tend to still follow processes which are largely non-electronic. Because the organizations are small, the business knowledge is more tacit than in digital form. People, especially the senior management, "know" what is happening (and all that needs to be known). This also concentrates decision-making. So, IT's role needs to be to assist in this decision-making process.

SMEs need more hand-holding and support, and thus can be very demanding customers. This is because they may not necessarily have trained in-house IT staff. At the same time, their ability to pay is quite limited. Hence, as customers, they have been an unattractive market for the IT vendors.

The most important issue facing SMEs is business growth. They have a fairly close tab of the expenses, so there is little room for optimisation there. The challenge is to generate new business, and manage that new business with the same (or incremental) staff so as to maximise profitability.

It is not easy for SMEs to educate themselves about new technologies and the impact they can have on their business. While there are all kinds of training institutions for computer languages and software packages, the one segment that still has been addressed on the training side is the business applications of technologies.

[They have] an even lower ability to spend. They typically need solutions which are a fraction of the cost of what has been available so far."

The series refers primarily to SMEs in emerging markets like India. Yet, the description just as easily could be describing small businesses in developed countries like the United States, Canada, Australia and much of Europe.

She believes small businesses are disincented to provide insurance, at least in her area (in the Midwest USA). Employer-provided health insurance premiums are two to four times more expensive than individual policies. Her employees could purchase individual policies, but she is prohibited from contributing to the premiums on their behalf.

As we noted here, the smaller the business, the less likely it will offer health benefits, due to cost. Unfortunately Medpundit, as a very small business with two employees, is in the category of employer where lack of coverage is most prevalent.

When a business has five or fewer employees, the typical health coverage strategies really break down. The economics of a pooled association plan may not make sense because of membership fees. And even many PEOs (professional employer organizations) shy away from employers with under 6 employees, again because of the economics. High deductible plans coupled with HSAs can be good solutions in some situations, but they are not for everyone and may require funding accounts up front.

This business demographic (5 or fewer employees) is ripe for a better health insurance solution. Perhaps one day a health insurer or other provider can figure out a new economic model that works for very small businesses in the U.S.

When it comes to nanotech startups, VCs are not exactly falling all over themselves to invest. Most of the funding action right now is in government grants.

That's according to Howard Lovy, News Editor of the nanotech industry's Small Times magazine (click here to subscribe -- you may qualify for a free subscription). In an article at Blogcritics, he provides insight into funding trends for nanotechnology entrepreneurs today:

"Government money, though, is a totally different story -- DARPA, NIST ATP, SBIR, the whole alphabet soup. It's really not the private sector that's boosting the industry right now. It's government spending. And that's a fairly normal phenomenon for an industry in its early phase. The government props it up, encourages it, gets R&D moving in the lab, helps it along into the startup phase, and then the Darwinian world of business kicks in.

Even there, though, startups can live to see another day primarily through government grants. And right now, the military is where the money is at. Shop your nanomaterial around and tell a VC that your superstrong, superlight nano-enhanced polymer would be useful for garage doors, and you might be shown the door. But go to DARPA and say it can help reinforce tank or aircraft or cockpit doors and can stop a speeding bullet, and you might have an easier time getting some dough."

Sounds like practical advice for nanotech entrepreneurs and early stage companies.

This blog is a terrific resource on these niche topics. I've already found useful references.

The Workers Comp Insider is published by the employees of Lynch Ryan, a workers compensation firm in Wellesley, Massachusetts on the east coast of the USA. The firm helps businesses -- large and small -- reduce their workers compensation costs.

The Workers Comp Insider is an interesting example of an established business using a weblog to communicate with customers. They do it without obvious commercials.

This is a weblog that leverages subject matter expertise. They provide the kind of in-depth information and analysis of their subject that you would expect of experts in their field.

One of the most useful features about this blog is the collection of link resources. It reminds me of some of the early link sites on the Internet. Remember how useful they could be before they became crassly commercialized with pop-under ads and other annoyances?

But you'll also find links to sites you probably never heard of and that only an expert in the field would know of. For instance, there are links to resources for "latex allergy" and "typing injury FAQ" (bloggers, take note, you might need this last one some day).

Lynch Ryan has done a good job integrating the weblog with their commercial website:

Even though the weblog has its own URL, it is appended to the company's website. Thus, on the commercial website, you find a menu button for the blog.

They have placed blog headlines on the home page of the commercial website. This is an excellent way to keep the home page fresh, with regularly updated content.

The blog uses the same color scheme and graphical elements as the company's commercial website.

The Workers Comp Insider has been on the web since September 2003.

The Power: The power of the Workers Comp Insider is in the subject matter expertise its writers bring to the table. You know they know their stuff. It's an excellent resource for information about on-the-job injuries and workers compensation

That includes the Small Business Survival Council, a U.S.-based small business advocacy group. They have criticized the ruling on the basis that free markets will provide enough protection, stating "entrepreneurs are hard at work looking to challenge the current dominant market players."

I agree that the EC's decision is not good for small businesses -- but for a different reason.

Microsoft's products simply have had a profound positive impact on small businesses.

I'll go even further: access to affordable desktop technology has been a major driver in the proliferation of small business.

For millions of small businesses, Microsoft's products and perhaps a few others such as Intuit's QuickBooks have created untold productivity gains. They keep small business operating costs low.

They level the playing field. Now even a home-based business has access to the same spreadsheet, word processing and presentation tools as a Fortune 500.

Microsoft has created a uniform technology platform across which businesses can do business quickly, conveniently and efficiently. Microsoft's technology has become as necessary as utilities such as water or electricity -- something you rely upon without thinking about.

Millions of small businesses value Microsoft products because they don't have to expend extra time and money on custom programming. They don't have to cobble together lots of software applications and make them interoperate. They don't have to spend money training employees on how to use new or unusual software programs.

What's more, the very thing the trust-busters complain of is something small business owners value highly: bundling.

Take this example. A friend of mine, a consultant in the medical device field, recently told me a hilarious story about wasting the better part of a day trying to get a document into a client's hands. The document was created by a third party using a software program neither my friend nor her client had. After spending nearly the entire day trying to convert the document into another format and then trying to find someone who had the program, eventually she had the document faxed to her. She then created a PDF for the client.

And what was the program? Ironically, it was Microsoft's Project. As my friend said, she didn't know why Microsoft didn't just bundle Project up with Office. "It would be a lot easier on everyone."

All of which brings me to an interesting question posed by the SeattlePI.com's Microsoft Blog. Todd Bishop muses aloud in response to a reader's question in a recent Walter Mossberg column asking why a certain program was not bundled with Windows. Bishop wonders: is the consumer asking the question asked because he is conditioned to expect bundling or is it because he wants bundling?

When it comes to small business, I think I know the answer. Most small businesses would rather have Microsoft bundle programs, than not. The convenience of having software installed on all computers so that it becomes the business standard is of real value to small businesses.

Undoubtedly I will get a half dozen emails from friends and colleagues in IT businesses. You'll tell me how vastly superior Linux or OS is. But keep in mind you are atypical. The average small business has nowhere near your level of expertise to select, install, integrate and maintain software. And yes, I realize that Microsoft products are the most often attacked with viruses and malware. But smart businesses manage OK with standard antivirus packages. Also, I strongly suspect that if Linux were used more widely, it too would be prone to many more attacks.

"Europe is under threat as never before. It is ... globalisation which is forcing the average European employer and worker to compete with their counterparts on the other side of the planet. Regulating labour laws is a stop-gap measure. What needs to happen to revitalise the European economy is that the average European needs to want to contribute to its growth story. If we focus on being net contributors to the system, rather than net-takers from it, we will see the difference."

The article goes on to outline the issues getting in the way of entrepreneurs and small businesses in Europe. They include over-regulation; fear of failure; lack of confidence by small business owners in their own leadership skills; unwillingness of larger companies to take a chance on doing business with smaller companies; venture capital more focused on the "black art" of deal making than on markets and talent; and entrepreneurs taking the safe route to avoid failure instead of taking risks to win.

The article is describing entrepreneurship and small business in Europe. But, to readers from the U.S. -- and, I suspect, other parts of the world -- the issues will sound strikingly familiar. Entrepreneurs and small business owners across the globe have more in common than not, it would seem. In many instances the differences are just a matter of degree.

Traditionally the industry has been made up of many small agencies. But the past decade has been rough.

First the airlines started cutting the commissions paid to travel agents to book tickets. Eventually they eliminated commissions altogether. At the same time Internet travel websites grew. Then came September 11 and a worldwide travel slump.

The result? The travel agency industry is consolidating at an astonishing pace. In two years the number of agents declined 24%.

Travel agencies are going out of business right and left -- especially the smaller ones that can't leverage economies of scale. Or they are being absorbed by other agencies.

Instead they have improved their operations, by cutting overhead. They are developing niche specialties, such as planning cruises, safaris and tour packages. And they are developing high degrees of customer service and creating an "experience" for the consumer.

What's in store for the future? A Forrester spokesperson says the worst is over now. The U.S. Department of Labor predicts less demand for travel agents, but says the rate of decline will be partially offset by increased air travel and an increase in foreign visitors, whom travel agents are assisting. But expect more consolidation in this stressed out industry.

The Wall Street Journal has a nice piece outlining a trend that we have discussed before here at Small Business Trends: the growth in paid Internet content.

Contrary to popular wisdom, all content is not free online. Paid content is a huge market, to the tune of $1.6 billion (USD) in the U.S. last year.

And it continues to grow. According to the Online Publishers Association, a source cited in the article, U.S. consumers alone spent $300 Million (USD) more on paid content last year than the year before.

Make sure you have something to sell that users can't get elsewhere for free. The harder it is to find or the more unique, the more likely you can get paid for it.

Give away some information on the site for free. In other words, offer a free registration level and give away the kind of information that is available elsewhere for free. Then offer password-restricted sections of the site where you charge for the information that is (1) scarce or (2) delivered with some kind of value-add such as a service.

Provide free samples and trial subscriptions in order to turn free subscribers into paying ones. Even on many highly successful sites, the number of paid subscribers/purchasers is a mere fraction of the total subscribers.

Ease your users into becoming paid subscribers. Set prices low and raise them over time to get to your target price. Offer multiple price levels.

Create package offerings and bundle multiple services and content pieces together under a single fee. Only 12% of content sellers charge "by the drink."

Retain your subscribers by giving them more for their money.

Upsell and cross-sell to build add-on revenues. The cost of acquiring new customers is high. You want to retain your existing customers, increasing the volume of sales to them over time.

Many small content-based Internet businesses (including weblogs) are struggling to make money from their sites. Although a paid content model is not as simple to implement as an advertising based model, the Journal article suggests that if the business model is carefully designed and executed, paid content can work. The article has a lot of useful detail. Click here to read the full article -- IF you are a paid subscriber.

Venerable Coca-Cola seems to be jumping on the experience-economy bandwagon. It has launched Coca-Cola Red Lounges in malls in Chicago and Los Angeles. Aimed at teens, the approximately 4,000 square feet venues offer exclusive music, movies, and games. Producers of the entertainment include the music video channel FUSE, G4 Media, Sony, ESPN Video Games, and Twentieth Century Fox.

Complete with custom-built furniture, a plasma-screen media wall, and sound domes, the lounges are a place for teens to hang out with friends and enjoy interactive entertainment. They host teen-targeted events and promotions and award prizes to visitors during key shopping periods.

Red Lounges are a commercial version of the Coca-Cola Red Room that was part of the set for American Idol. The first Red Lounges opened up a year and a half after Coke COO Steve Heyer proclaimed that the world was moving into an experience economy.

In an experience economy, companies differentiate themselves by offering an experience along with goods and services that are becoming increasingly commoditized.

Coke isn't the only company to try providing experiences as a core appeal agent for selling its products. Disney just may be the granddaddy of experience-economy companies.

How strong a trend this is and the variety of markets it will penetrate remain to be seen. But when a giant like Coke gives it a try, you have to think about ways your company could use it. So, if you're selling to small and midsize businesses, how can you adopt experience-economy concepts? If you're using experience-economy approaches tell us about them.

Editor's note: This is the seventh in our popular weekly series of PowerBlog Reviews of other weblogs...

Economic Development Futures is a blog containing "Information and Insights About Where Economic Development is Headed." It is a detailed resource for the latest happenings in the field of economic development, including business, government, social and cultural issues.

ED Futures has been on the Web since late 2002. The site is run by Don Iannone. Don is an economic development professional and former university professor located in Cleveland, Ohio, USA.

ED Futures takes a global view. It covers economic development happenings across the developed world. In a typical week you might find posts relating to regions as geographically diverse as Mexico, Israel, China, Tibet, Canada, the Phillipines, Australia, and various states within the U.S.

What I like best about this weblog is the way Don takes brave, even controversial, stands and asserts his views.

Take, for instance, this post about productivity gains and offshore outsourcing. Don, lamenting what he perceives as a near total lack of proactive solutions on how to deal with the problem of offshore outsourcing, proposes his own solution. He suggests something novel: encourage, incentivize, even pressure foreign companies to lay down roots in the U.S. and do business here.

In other words, he suggests embracing globalization instead of being the victim of it. While not everyone may agree with Don, virtually everyone will respect him for being one of the few voices to offer up a proactive solution on this challenging and polarizing issue.

Don is a disciplined, prolific blogger, averaging 3 or more posts each day. He posts virtually every day, except possibly when he is travelling on speaking engagements or to consult with cities and regions about economic development.

ED Futures is accompanied by a free newsletter that reaches out and keeps readers informed about posts of note on the blog. Both the blog and the newsletter are important marketing components of Don's consulting business.

The Power: The power of the Economic Development Futures blog is the in-depth treatment of its subject matter -- economic development -- and the courageous way it addresses thorny issues of our time. For anyone trying to understand the broader economic environment in which businesses operate today, ED Futures can help navigate the way.

The growing field of network mapping has potential to help solve that age-old problem of how to cost effectively sell into the small business market. It is not THE answer, but it offers a useful analytic aid.

What is Network Mapping?

Network mapping is all about how a "picture is worth a thousand words." Network mapping uses special software to map out the relationships between ideas, concepts, people, or transactions.

It helps you see things you might not otherwise see (or see as clearly) except for being presented graphically. For example, this network map demonstrates key players in the Internet industry:

Or, as colleague Valdis Krebs has shown, network mapping can be used to illustrate political leanings through examining book-buying data from Amazon.com and barnesandnoble.com (see New York Times article).

Selling to the Small Business Market

I'm intrigued by the thought of using network maps to identify and "see" the buying behaviors by small businesses. And figure out how to cost effectively sell to the small business market.

The size of the small business market, both in the U.S. and worldwide, is huge. And due to its size, it is attractive. But it is also difficult to sell into this market cost-effectively. Companies often can't afford the marketing and sales efforts to reach such a fragmented market.

Many vendors resort to selling through channel partners who have existing relationships with small businesses. They do, that is, if they can identify the right channel partners. In some industries, it is not readily apparent who the right channel partners are, i.e., which entities have contact points with the intended small business targets.

This is where network maps could be an important analytic tool.

Let me give you an example. Kirsten over at re:invention recently wrote that eBay's deal with Monster.com was not likely to work, because small businesses simply didn't go through Monster to hire personnel.

In that instance, eBay (an extraordinarily well-run company, but not always perfect) had made a choice of a partner that is not likely to be able to deliver the small business market.

A network map might have been a useful tool. By mapping out the job recruitment players in major metropolitan markets, eBay might have identified better channel partners. Or determined that a partner approach just would not work.

I'd be interested to hear from you, readers, about using network mapping for selling to the small business market. Is this a promising technique? Or are there other, better answers, and if so, what are they? Or is selling to the small business market simply a problem without easy solutions? Email me at anita-at-anitacampbell.com with your comments. I will collect them in a subsequent post.

Instapundit writes in an article over at Tech Central Station that if he were starting from scratch, he would look around to see what topics are not being covered well by major media and fill the need with a niche blog. He specifically mentions subject matter blogs as a promising area.

We have written here and here on Small Business Trends about the U. S. Patent Office granting overly broad patents for software and information technology products.

Eolas Technologies is the poster child of these ill-conceived patent grants. Eolas was granted a patent for a commonly used software plug-in feature in web browsers.

Recently, the U.S. Patent Office granted the request of the World Wide Web Consortium to reconsider the patent grant. The grounds: the patent is based upon technology already being used in browsers before Eolas Technologies claimed to have invented it.

This is just the beginning of another round of legal maneuvers. Sorting it all out could take a few more years. But given the fact that the Patent Office has conducted only 151 such re-examination requests out of the last 4 million patents, many are optimistic that this signals the Patent Office has come to its senses. And that would be a good thing for small businesses.

Overly broad patents hurt businesses of all sizes, especially small businesses. Overly broad patents increase the costs of doing business and impede online commerce. Small businesses are forced into added expense when they (a) have to change technologies upon discovering that a technology is subject to a patent, or (b) are forced to pay royalties -- even if they and millions of others have been using the technology for years.

Editor's note: This is the sixth in our popular weekly series of PowerBlog Reviews of other weblogs...

Blog Business World is all about blogs in "business, marketing, public relations, and search engine optimization for successful entrepreneurs."

Blog Business World is published by Wayne Hurlbert of Manitoba, Canada.

Wayne gives practical advice about business blogging. Often he uses his own first-hand experiences to illustrate valuable lessons.

Typical topics include timely and useful nuggets about how to make a business blog a success. One post, entitled "Blog visitors: How do they find you?" recommends analyzing traffic logs to discover how visitors find your weblog. Wayne gives tips about how to build on those sources of traffic, once you understand how visitors are getting to your site. He even uses his own blogs as examples.

The posts include general business advice for entrepreneurs and established businesses. For instance, in "A sad tale of a business that could have been," he recounts a poignant and true story about the need to carefully choose business partners.

One of the most helpful things about Blog Business World is its easy-to-understand writing style. Wayne uses short sentences and short paragraphs, something critical to online reading. He updates regularly -- usually daily.

But what I like best of all about this blog is its friendliness and sense of inclusion. Wayne frequently mentions other bloggers. But he does more than just mention them. He also goes out of his way to help other bloggers in need of employment and freelance writing jobs, such as in his "Bloggers Helping Bloggers" posts.

The Power: The Power of Blog Business World is in the valuable and practical help it gives to other bloggers everyday. Sure it gives 'blog for business' advice. But more than that, it actually extends a helping hand now and then to other bloggers when they need it most.

How ironic. Wal-Mart, which has in the past been accused on driving small mom and pop retail outlets out of business, is now catering to small businesses. You know the small and midsize business (SMB) market is attractive when the world's largest retailer wants a piece of it.

There were 1200 people there, about 90% of whom were women. Most were entrepreneurs and small business owners.

The main reason I went was to hear the keynote address by President George Bush. I wanted to hear the President's message for myself -- first hand.

You see, in a presidential election year I find it very hard to get a "spin-free" message. The major media outlets seem compelled to spin reports of what the President says to suit their political viewpoints. Conservative, liberal, Republican, Democrat, left-wing, right-wing -- they all "spin." I wanted to hear what the President had to say for myself, without the filter of someone else's political views.

In a talk that was well over 30 minutes long, President Bush spoke extensively about business, especially small businesses and entrepreneurs. Here are some of his remarks (paraphrased):

On entrepreneurs and small businesses:Entrepreneurs are risk takers and dreamers and doers. Entrepreneurs and small businesses play a crucial role in the U.S. economy. They create two-thirds of the new jobs in the U.S. Nearly half of all U.S. small businesses are owned by women. And businesses started by women are growing at twice the national rate. You can't have a healthy economy without a healthy small business sector.

On creating jobs: The role of government is not to create wealth, but to create an environment in which the entrepreneurial spirit flourishes. Government does not create jobs. Businesses create jobs.

On job losses: Job losses have been caused by productivity increases. Productivity improvements are changing the U.S. economy. Manufacturing output increased six-fold in the past 50 years, yet the number of employees stayed roughly the same. Higher productivity brings challenge. Productivity means companies expand their businesses without adding more employees. It is good for businesses, and it is good for consumers (lower prices, higher wages), but it also means businesses need fewer jobs. And small businesses are leading the way in this productivity revolution.

On taxes: The majority of small businesses are sole proprietors and Subchapter S corporations. When individual tax rates are lowered, that means tax rates are also lowered on small businesses which are taxed at individual tax rates.

On trade protectionism: Isolationism is a defeatist mindset. Instead of building barriers to trade, we need to break them down. International trade works two ways. In the U.S. we benefit from the ability to export to other countries, and from foreign companies employing local people. Under NAFTA (North American Free Trade Agreement), Ohio's exports to Mexico have tripled to $2 Billion (USD). Over 900 foreign companies employ workers in Ohio. For instance, 10% of Honda's workforce lives in Ohio, about 16,000 workers. U.S. workers are building BMWs and exporting them to Germany; exporting computer chips to Japan; and exporting California wine to France. There are 6.4 Million Americans who work for foreign companies. A policy of isolationism is a sure way to threaten those U.S. jobs.

On regulation: America must remain a great place to do business, especially for small businesses. That means less regulation, less taxation of businesses. We must have tort reform, because frivolous lawsuits are not conducive to business.

There was a lot more, and you can read the entire transcript of the President's remarks here. There is even an accompanying Fact Sheet. Whether you agree or disagree with President Bush's positions, he is the leader of the world's largest and fast growing economy in the developed world. As long as he is President, his policies and viewpoints are important. We report, you decide.

Small-business PPC advertisers currently allocate on average 23% of their total advertising budget to PPC activities. Of these, 54% expect to increase their PPC spending next year.

"These data show that PPC is an increasingly important part of an SME's overall advertising program," said Greg Sterling, director of The Kelsey Group's Digital Directories: Interactive Local Media Continuous Advisory Service. "PPC's appeal is based in large part on the perception that it's a low-cost means of customer acquisition."

This research is based on a survey of 460 advertising decision makers at small businesses with a Web site. (Hat tip to Doug, the Infoman, for alerting me to this study.)

Based on my own anecdotal evidence, I would concur with this study.

In the past many small businesses used to tell me that: (1) they found Web advertising too expensive, and (2) they did not get targeted traffic that they could turn into business...the traffic was from surfers around the globe who were not viable business prospects.

Fast forward to this year, 2004. Hardly a week goes by that I don't hear from a small business using Web advertising to attract new customers. The biggest increase I am seeing is in the B2B side, i.e., among businesses selling to other businesses.

Just this week I met with a niche employee-benefits organization that is now bringing in one third of its new business through targeted Internet advertising, mainly Google AdWords. This company has figured out how to define key words precisely enough to get targeted traffic. Virtually all of this company's business is local, with 90% of it coming from within a 150-mile radius. They successfully use the Web to generate leads that the sales force follows up on and closes in person.

Of course, Web advertising is not the answer for every business. For example, among small businesses which depend heavily on retail walk-ins (restaurants, shops, landscape nurseries, etc.), I encounter few of them acquiring new customers from the Web. They may leverage the Web for other important purposes, such as product information or customer service, but not for direct customer acquisition.

Increasing use of pay-per-click advertising is a significant trend among small and midsize businesses -- especially those businesses which sell to other businesses and which have a niche product or service that lends itself to being described precisely in advertising key words.

"Although individual firms' IT budgets are relatively small, customers in this market represent a tremendous opportunity for IT providers. Telecom, applications and LAN equipment should be particularly interesting, as these are expected to be key areas of growth in this market moving forward. In-Stat/MDR expects that small businesses will spend more than $215 billion on IT products, services, and personnel by 2008."

In-Stat MDR says the small business market accounts for roughly 31% of total U.S. business IT expenditures. It is the second largest market after the enterprise (large business) market.

Here at Small Business Trends we follow a large number of research reports from a variety of research firms. One element of the In-Stat MDR research that we find especially useful is the clear way they delineate the small and midsize business market. In their lexicon, a small and home office (SOHO) business has 1 to 4 employees. A small business has 5 to 99 employees. Midsize businesses have 100 to 999 employees. A firm with 1000+ employees is considered the enterprise (large business) market. Defining markets according to size -- in this case employees -- positions vendors to better target each segment's distinct needs.

"The BugBlog covers the things that go wrong when you use computers. These include classic bugs, or errors in coding; security problems; incompatibilities between programs, or between software and hardware. It also covers what we feel are really stupid and/or backwards features in programs -- ones that companies often say aren't bugs but 'features'."

The BugBlog is published by Bruce Kratofil of BJK Research, located in Cleveland, Ohio USA near the Great Lakes, immediately south of Canada.

Bruce has an extensive history tracking and reporting on computer bugs. He served as Editor of the now-defunct BugNet. He has authored numerous articles on computer bugs. He also co-authored a book, The Windows 95 BugBook, which was put on display at the Smithsonian Institution.

What I like best about this weblog is that it's simple and to the point. It's a good resource for the average computer user who just wants to know key facts about computer bugs -- without having to spend hours wading through knowledge bases at the software providers' sites.

It's especially useful for owners of home businesses and very small businesses. Most owners of very small businesses don't have the luxury of network administrators and computer help desks. If you are a small business owner using a software application and something screwy happens with it, you have to diagnose the problem and solve it on your own.

That's where the BugBlog can be helpful. You can stay up to date through the daily postings on the site, or you can search it when an issue pops up (using your Google toolbar).

What's more, it is written in everyday language with some light humor thrown in. You don't have to be a techno-geek or write software for a living to understand the BugBlog.

The BugBlog also offers a members-only portion of the site and a weekly newsletter called the BugBlog Plus, for a very small fee. The BugBlog Plus provides additional information about computer bugs, over and above what appears in the free weblog. At $18 USD/year, the subscription costs less than a latte once a month at my favorite coffee house.

The Power: The power of the BugBlog is that it is a time-saver for those who want to stay up to date on issues affecting their computers, but who don't have time to hunt down and wade through all the information on their own, or who wouldn't know where to look. For a small business owner or the average consumer, the BugBlog can can save lots of time and headaches.

It turns out that starting a business in Japan can mean more than simply business risk -- it can mean risk to life and limb.

An article in the Japan Times highlights the high rate of suicide among Japanese men, and ties it to the practice of banks requiring personal guarantees for business loans. The reasons for the suicides: shame when the business failed, and the need to use life insurance monies to pay off debts so that the banks will not go after relatives and friends who have guaranteed the debts.

Joi Ito, who lives in Japan, says the practice of giving personal guarantees for business loans is widespread. Relatives, friends and relatives of relatives frequently hit you up for a personal guarantee. It is considered socially unacceptable to refuse.

What I find interesting is the stark contrast with U.S. banking practices. In both countries, small business loans are usually accompanied by personal guarantees. But there the commonality stops.

In Japan personal guarantees are regularly sought from those outside the business. In the U.S., on the other hand, personal guarantees tend to be limited to those with an ownership stake in the business.

In Japan the banks are dead serious about enforcing the personal guarantees. If we are to believe the comments left by others on Ito's weblog, some local Japanese banks even hire gangsters to enforce guarantees. There also appears to be no limit in time or amount to the guarantees.

This banking practice has a chilling effect on entrepreneurship and starting small businesses in Japan. (How many suicides and broken legs does it take to convince someone not to seek a business loan?) According to the Global Entrepreneurship Monitor, Japan ranks at the bottom across the globe in the level of entrepreneurial activity, as shown on this chart:

Matt's post summarizes the advice for small businesses on dealing with lawyers, including negotiating flat fees, approving staffing and questioning bills that seem high.

Another piece of advice not commonly found is for small companies to hire solo and small law firms to keep a lid on costs. The article's worth a read for those who market to small business - and the advice could easily be converted into an effective sales pitch for lawyers seeking to advise and represent small companies."

Having been a corporation attorney for a number of years, I can say that the advice to small businesses to hire small law firms is good advice.

As a corporation attorney, a large part of my job was to hire and supervise outside counsel. Over the course of more than a dozen years I hired and supervised hundreds of law firms across the United States, Canada, Germany and the United Kingdom.

Even though the companies I worked for were large corporations, I often sought out small and midsize law firms.

Smaller law firms tend to be practical and results-oriented. They are conscious of costs -- yours -- and do the job efficiently.

Smaller law firms also tend to be easier to work with than large firms. I could get the kind of results I wanted. For instance, I found small firms were more amenable to the following kinds of approaches I used with my attorneys:

I could (and did) demand that my attorneys write contracts in plain English, instead of legalese. I routinely nixed excessive numbers of "defined terms," i.e., capitalized definitions in contracts. Many attorneys feel defined terms are more precise. But if carried to excess they make contracts impossible for business people to decipher. And if the contract is unintelligible to the business people who have to carry it out, it's of little value to the business.

I regularly suggested optimum contract lengths (e.g., "about 6 to 8 pages"). Normally I got back something longer. But just by suggesting a short length it set a certain expectation. The lawyers tried to keep documents concise because they knew I valued brevity.

Over the years I got good at keeping minor issues and theoretical concerns from taking on a life of their own during contract neogotiations. I would simply declare "that's a business decision." No contract, no matter how detailed, is going to stamp out all risks in a business transaction. At some point the business owner has to exercise common sense, take the situation out of the lawyer's hands, and be responsible for making the decision.

In litigation, I frequently pushed for early settlements. Litigation is expensive in this day and age. In my experience, one of the most underestimated costs in litigation is management time and distraction. And small businesses may be least able to afford that management distraction. For example, in a small business the company president may need to be heavily involved in defending a lawsuit -- the same company president who may also be the company's best sales person. Hmmm. Let me see. If I am a small business owner, which will I choose? Fight the battle royal over a lawsuit that won't mean anything in three years' time, while sales go in the tank? Or settle the lawsuit and focus my attention on sales?

Of course, there are times when even a small business may be best served by a large law firm. For instance, a small business faced with a large complex transaction requiring specialized legal expertise needs a law firm that has been down the road before. Often that means hiring a large law firm. But most of the time, small businesses will be far better served by small law firms.

Statistics Canada has issued a new report suggesting that small businesses have caught up with larger businesses vis-a-vis using email and accessing the Internet.

However, there is still a wide gap when it comes to having websites. In 2002 only 27% of small businesses had websites, compared to 77% of large businesses.

One of the reasons for such a large gap, according to the study, is that larger businesses have more resources and funds to devote to websites, intranets, extranets and eCommerce efforts.

The study is available online here. It has lots of good data and is worthwhile for anyone interested in IT adoption in Canada's small and midsize market.

One additional point of interest is how Statistics Canada has defined small, medium and large business. Small is up to 19 employees, medium is up to 99 employees (499 for manufacturing), and large has 100+ employees (500+ for manufacturing). This is significantly smaller than most U.S. size categories.

My post on Monday, March 1st about online banking prompted several readers to speak out.

Since we do not have comments turned on here at Small Business Trends (I've got enough spam in my email inbox, thank you, without having to worry about clearing it out from blog comments), I'll share these reader insights here:

Marianne from Arizona, USA sent an email agreeing how important online banking is to small businesses. Small firms need it so that they can download transactions into programs like QuickBooks and not have to waste time re-keying them.

Jerry over at Red Wheelbarrow (a transplant to Cleveland, USA from Canada) points out that one advantage large banks have over small banks when it comes to online efforts is economies of scale. Large banks can dedicate staff to their web efforts. Small banks tend to hire outside contractors which can be much more expensive.

JRT (whereabouts unknown) suggested that some small banks had excellent websites and recognized the importance of online banking to small businesses. (I agree, JRT, "some" do.)

From TM over at the Flit(tm) blog comes an interesting suggestion that small banks could learn something from Ace Hardware and pool their efforts in online banking, lowering costs and improving service.

Thanks to everyone who commented. Your insights are helpful not only to Dave and me here at Small Business Trends, but to your fellow readers.

However, other sources question the study's conclusion. They claim small business growth has stagnated in recent years. There is even some suggestion in the article that the findings may have been deliberately inflated to suggest that the Russian economy is stronger than it otherwise is.

Small community banks often do a better job than large banks at serving small business customers.

But not when it comes to online banking. In the online world, the large banks shine.

Here's a case in point:

A few months ago I met with the President of the one of the regional National City Banks. It was during one of their Small Business Blitzes. I mentioned being disappointed in the online offerings of my own small community bank.

My bank had been slow to offer online banking. And when they finally offered it, they made it inconvenient. I had to go meet with someone at the bank to sign up, instead of being able to sign up online. It was also expensive. They wanted to charge me $35/month to use it. And to top it all off the functionality was limited. Consequently, I started looking around for a new bank.

National City Bank, I learned from the President, had made it a corporate goal to create the best banking website, especially for small businesses.

Partly it has to do with having the resources to mount a world-class online banking site. Here the big banks have an obvious advantage over small banks with lesser financial resources.

And partly it has to do with attitude. My 2-branch community bank did not think online banking was important to its customers. It placed more emphasis on personal service in the branch. But that is not enough in this 24/7 world. Small business people expect to be able to conduct banking business wherever they happen to be, at whatever time of day. The large bank understood this and made online banking an important complement to their in-branch banking.